Spotify said it is not experiencing any negative effects from blowback over podcast hosts like Joe Rogan, with the company’s first-quarter results exceeding Wall Street forecasts.
The Stockholm-based audio giant swung to earnings of 24 cents a share compared with a loss of 30 cents a year ago. Revenue inched up to $2.8 billion from $2.6 billion. Both top and bottom line figures came in well ahead of analysts’ forecasts.
During a conference call after the release of the numbers, CEO Daniel Ek and CFO Paul Vogel both maintained the company’s podcast business has never been stronger. Rogan was never named specifically on the call, but the early part of 2022 the surfacing of offensive and racist comments from the host put a bright spotlight on his Spotify deal, which is worth a reported $200 million. A number of prominent musical artists, including Neil Young and Joni Mitchell, pulled their music from Spotify in protest.
Last week, it was reported that Michelle and Barack Obama’s production company Higher Ground, a marquee podcast entity signed by Spotify, will not renew its exclusive deal there and will move to a competitor.
Management offered a unified response to the drama, maintaining that it hasn’t slowed their momentum.
“For investors, structurally, podcasting should be a better business model than music, from a gross margin perspective,” Ek said. “We feel really good about the investments we’re making and the long-term implications they will have on our business and our shareholders.”
Vogel pointed to metrics at all-time highs, including the ratio of podcast listeners to total listeners, as well as total podcast streams. “We’re seeing that engagement on the platform,” he said. “When I look out over the long term, in terms of the benefits and the margin profile of the podcasting business, nothing has changed at all in my mind in terms of optimism.”
The streaming audio giant reported 419 million monthly active users in the quarter ending March 31, up 19% over the prior-year period. The tally accounts for 3 million users cut loose due to a service outage.
The number of paid subscribers hit 182 million, up a net 2 million from the previous quarter despite a loss of 1.5 million due to the company’s pullout in Russia. Like a number of companies in the tech space and many other sectors, Spotify paused operations in Russia after the country invaded neighboring Ukraine.
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